In recent years there has been increased interest in cognitive function in bipolar disorder (BD) as a means of understanding and exploring biological mechanisms relating to predisposition, disease expression and outcome. Despite significant methodological differences between studies we can begin to discern meaningful patterns from existing data. The evidence reviewed suggests that: (a) premorbid cognitive dysfunction is not a dominant feature of BD; in contrast to other severe psychiatric conditions, enhanced cognitive function may be a risk marker for BD; (b) in BD patients with established syndromal disease, trait-related cognitive impairment is reliably seen in the speed of information processing, verbal learning and memory and response inhibition; (c) cognitive function appears to remain stable post-disease onset in the majority of patients although the risk of dementia in old age is increased; (d) cognitive impairment is a key predictor of functional outcome in BD. These findings underscore the importance of cognition in BD as a marker of neural integrity across all phases of the illness and as a therapeutic target in disability reduction.